PRAXEOLOGICAL ANALYSIS OF ESG: THE PRACTICAL IMPLEMENTATION OF THE STAKEHOLDER MODEL

This paper presents a praxeological examination of ESG —Environmental, Social, and Governance— conceptualized as the practical enactment of the Stakeholder Model, where the corporation is seen as an instrument for social organization. At the heart of this scrutiny is the entrepreneurial function, explored through the lens of the impossibility of economic calculation theory, dynamic efficiency theory, and the theory of spontaneous order. These notions are contrasted against the neoclassical critique of ESG challenges, underscoring that the Austrian viewpoint penetrates more profoundly into the fundamental issue: ESG is an institutional encroachment on the entrepreneurial function and, thus, a variant of socialism that induces miscoordination in social processes. The paper delves into the multifaceted causes and resultant effects, elucidating why the prevailing prescriptions for ESG enhancement are likely to lead to augmented regulation and further miscoordination.